Boston — February 8, 2007 — Tempests rarely trouble the tidy teapot that is the spend management space, but technology consultancy Aberdeen Group touched off a small squall recently with the release of a report called "e-Procurement Head-to-Head," comparing best-of-breed e-procurement solutions with the offerings of major enterprise resource planning (ERP) players Oracle and SAP.
The report, authored by Vance Checketts, channel director for global supply management at Aberdeen, and originally released at the end of December, might have passed unnoticed had not Ariba, a best-of-breed provider of spend management solutions, highlighted the findings in an announcement of its own this week.
As it happened, the report singled out Ariba as "the most established" of the best-of-breed players, and Checketts went on to write that, based on data collected, for Aberdeen's recent "e-Procurement Benchmark Report," from nearly 200 e-procurement customers, "best-of-breed solutions, like Ariba, hold a narrow lead in the competitive battle for e-procurement excellence" in key areas required for e-procurement success.
"Our findings show that customers of best-of-breed provider Ariba either outperformed or were on par with customers of larger Oracle and SAP e-procurement solutions in nine out of 10 metrics," Checketts reported, citing such metrics as "suppliers enabled," "transaction volume" and "spend under management."
Oracle and SAP customers ranked ahead of Ariba clients only in the "integration to other systems" metric, perhaps not surprising given that both ERP players offer broad sets of enterprise systems for managing a variety of processes.
One standout finding that Checketts cited is the number of customers of Oracle, SAP, Ariba and other "best-in-class" solutions that had 1,000 or more suppliers enabled. For Ariba, the figure was 20 percent, 14 percent for other "BIC" enablers, and 0 percent for Oracle and SAP.
Those figures, while certainly of note, might not tell the whole story, of course. In a note posted on Jason Busch's spend management blog www.spendmatters.com regarding Ariba's announcement about the Aberdeen study, a commenter pointed out that it is typically more important to look at the percentage of spend captured within an e-procurement system: if 80 percent of your spend is with fewer than 50 suppliers, enabling more than 1,000 suppliers might be a lot of effort to capture relatively small portions of your total spend.
In Ariba's statement regarding the report, the company's vice president for solutions marketing, Bob Shecterle, said, "Spend management is a dynamic activity that requires nimble solutions that can be quickly and easily deployed to deliver proven results." Shecterle went on to say, "With Ariba, companies of all sizes can have the technology, category expertise and services they need to drive successful e-procurement initiatives, enhance the value of their ERP systems and achieve their strategic goals."
Ariba suggested that spend management represents a journey, with different companies electing to start small — deploying a solution to attack direct materials sourcing, for example — while others focus on larger strategies, up to and including deploying a full spend management suite.
Naturally, Ariba believes it has a solution to match each stage of this journey, and other solution providers likely can make a similar claim. The Aberdeen report, for example, cites such companies as Acquirex, Coupa, Elcom, ePlus, ICG Commerce, IQ Navigator, Global eProcure, Ketera, PurchasingNet, Puridiom and ProcureStaff as "core providers" — those that offer e-procurement-focused solutions; as well as cc-hubwoo, IBX, IntraMalls, GHX, Perfect Commerce, SciQuest and Quadrem as "network-based service providers," which offer e-procurement functionality as part of their broader offering around supplier catalogs or other network services.
Blogger Jason Busch adds to this list by pointing to Vinimaya and Aravo as two enablers that can help companies tackle the supplier enablement challenge.
Checketts offers several recommendations for ensuring e-procurement success, and his advice can be read in the report available at http://www.aberdeen.com/c/report/research_briefs/E-Proc_Tech_RB_VC_AB_3778.pdf.
The report, authored by Vance Checketts, channel director for global supply management at Aberdeen, and originally released at the end of December, might have passed unnoticed had not Ariba, a best-of-breed provider of spend management solutions, highlighted the findings in an announcement of its own this week.
As it happened, the report singled out Ariba as "the most established" of the best-of-breed players, and Checketts went on to write that, based on data collected, for Aberdeen's recent "e-Procurement Benchmark Report," from nearly 200 e-procurement customers, "best-of-breed solutions, like Ariba, hold a narrow lead in the competitive battle for e-procurement excellence" in key areas required for e-procurement success.
"Our findings show that customers of best-of-breed provider Ariba either outperformed or were on par with customers of larger Oracle and SAP e-procurement solutions in nine out of 10 metrics," Checketts reported, citing such metrics as "suppliers enabled," "transaction volume" and "spend under management."
Oracle and SAP customers ranked ahead of Ariba clients only in the "integration to other systems" metric, perhaps not surprising given that both ERP players offer broad sets of enterprise systems for managing a variety of processes.
One standout finding that Checketts cited is the number of customers of Oracle, SAP, Ariba and other "best-in-class" solutions that had 1,000 or more suppliers enabled. For Ariba, the figure was 20 percent, 14 percent for other "BIC" enablers, and 0 percent for Oracle and SAP.
Those figures, while certainly of note, might not tell the whole story, of course. In a note posted on Jason Busch's spend management blog www.spendmatters.com regarding Ariba's announcement about the Aberdeen study, a commenter pointed out that it is typically more important to look at the percentage of spend captured within an e-procurement system: if 80 percent of your spend is with fewer than 50 suppliers, enabling more than 1,000 suppliers might be a lot of effort to capture relatively small portions of your total spend.
In Ariba's statement regarding the report, the company's vice president for solutions marketing, Bob Shecterle, said, "Spend management is a dynamic activity that requires nimble solutions that can be quickly and easily deployed to deliver proven results." Shecterle went on to say, "With Ariba, companies of all sizes can have the technology, category expertise and services they need to drive successful e-procurement initiatives, enhance the value of their ERP systems and achieve their strategic goals."
Ariba suggested that spend management represents a journey, with different companies electing to start small — deploying a solution to attack direct materials sourcing, for example — while others focus on larger strategies, up to and including deploying a full spend management suite.
Naturally, Ariba believes it has a solution to match each stage of this journey, and other solution providers likely can make a similar claim. The Aberdeen report, for example, cites such companies as Acquirex, Coupa, Elcom, ePlus, ICG Commerce, IQ Navigator, Global eProcure, Ketera, PurchasingNet, Puridiom and ProcureStaff as "core providers" — those that offer e-procurement-focused solutions; as well as cc-hubwoo, IBX, IntraMalls, GHX, Perfect Commerce, SciQuest and Quadrem as "network-based service providers," which offer e-procurement functionality as part of their broader offering around supplier catalogs or other network services.
Blogger Jason Busch adds to this list by pointing to Vinimaya and Aravo as two enablers that can help companies tackle the supplier enablement challenge.
Checketts offers several recommendations for ensuring e-procurement success, and his advice can be read in the report available at http://www.aberdeen.com/c/report/research_briefs/E-Proc_Tech_RB_VC_AB_3778.pdf.
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